Americans' tax burden is lightest in developed world

Americans' tax burden is lightest in developed world
By David J. Lynch, USA TODAY

COMPARING TAX BURDENS

How the USA and some other nations compare in total tax revenue as a percentage of GDP:

2007 2008*

Denmark 48.7% 48.3%

Sweden 48.3% 47.1%

Belgium 43.9% 44.3%

France 43.5% 43.1%

Italy 43.5% 43.2%

Finland 43.0% 42.8%

Austria 42.3% 42.9%

Germany 36.2% 36.4%

United Kingdom 36.1% 35.7%

Canada 33.3% 32.2%

United States 28.3% 26.9%

* = provisional Source: Organisation for Economic Co-operation and Development

You'd never know it from all the cable news chatter, but Americans bear the lightest tax burden in the developed world.
Total U.S. tax revenues in 2008 equaled 26.9% of gross domestic product, according to provisional figures released Tuesday by the Organisation for Economic Co-operation and Development. That figure â which includes local, state and federal taxes, including Social Security â was lower than the 1990 ratio and far below levels across Europe. In Denmark, the total tax take exceeds 48% of the economy. In France, it tops 43%; Germany, 36%.

To those on the right, who see Uncle Sam's comparatively light touch as a key to economic growth, the new numbers show what's at stake as the Obama White House battles the recession with generous doses of public funds. To others, the tax data from the 30-nation organization suggest the U.S. has room to raise taxes to pay for its unprecedented crisis-related borrowing.

"We're not an overtaxed country," says economist Dean Baker of the left-of-center Center for Economic and Policy Research.

Among all OECD members, the lowest 2008 ratios were recorded by South Korea (26.6%) and Turkey (23.5%).

In 2007, the last year for which complete data are available, the U.S. and Japan shared top billing as the least taxed developed countries.

The OECD data provide a sharp contrast to charges by conservatives such as Fox News' Glenn Beck, who says that the Obama administration is taking the country down "the road to socialism."

But Chris Edwards of the libertarian Cato Institute worries that the United States' comparatively low-tax profile â and its prospects for economic growth â are at risk. If government programs, including Social Security and Medicare, aren't trimmed, future tax increases could chill investment, he says. "I worry for the future of this country," Edwards adds.

The global recession has meant lower revenues from taxes on income, property sales and stock gains in most countries. Plus, many OECD countries cut taxes in the past year in hopes of jump-starting growth. Of 26 countries that reported provisional 2008 data to the OECD, 17 saw their tax-to-GDP ratios fall. And further recession-induced declines are expected when data for this year become available.

With trillion-dollar budget deficits forecast for several years and rising entitlement costs as Baby Boomers retire, many analysts say the U.S. tax take will rise.

"It's going to be politically painful. ... But our competitors are, for the most part, taxing themselves at higher rates," says Andrew Reschovsky, a professor of applied economics at the University of Wisconsin.

Without more information its hard to say if they are comparing apples to apples or apples to oranges.

What about state taxes, city taxes, capital gains taxes, etc., etc. And what benefits is government providing for those tax dollars? Health benefits, expanded social services, etc., etc.

The article as presented tells me nothing. Comparing tax rates in socialist countries to rates in a non-socialist country makes little sense from the standpoint the author is presenting to the reader.

Also, the corporate tax rate in the U.S. is one of the highest in the world. This is tax is a big burden on corporations trying to compete in world markets. Of course, they can move operations to countries that don't have such a high corporate rate to be competitive. Funny, do you think that might be why manufacturing jobs have left the U.S.? Wake up and smell the reality.

I am amazed at how few Americans actually understand our tax system. The revolt on the right has nothing to do the "aggregate amount of taxes paid in the US". It has to do with wealth distribution.

Here is something to chew on, 40% of Americans pay zero federal taxes. That's right...zero. The rich in this country also pay close to nothing in taxes. It's the middle class that gets f*cked. Take from the middle to give to the poor and bailout the rich. That is where the outrage is.

If you live in Norway, Sweden or France, I've got news for you, you are paying taxes. Even if you make 10k a year, you are paying a lot in taxes. In this country, if you make under 35k or so, you will pay nothing in taxes. That is not the case in this northern european countries.

In fact, in this country, not only does the poor not pay taxes, most of them actually get money back that was never theirs to begin with, thanks to the earned income tax credit. That is outright theft. Again, stealing from the middle class and actually giving cash back to the poor.

If we had a fair tax system in this country, the poor would not get money back, in fact, they would have to pay their fair share as well, as well as the middle class and the rich. That is how Europe does it. Here in the US, only the middle class pays taxes.

That is why you are seeing tea parties across the country. That is where the outrage is. Bailout Goldman, bill it to the middle class. Bailout corporate America, bill it to the middle class. Start a war, bill it to the middle class. Waste trillions in useless social programs that never work, bill it to the middle class.

And guess what happened to the middle class folks? It's gone. We killed it. We now call them the lower milddle and guess what...we're still sending them the bill.